Summary
BILL reported first quarter fiscal 2026 results for the period ended September 30, 2025. Total revenue was $395.7 million, up 10.4% from a year earlier. Gross profit was $318.7 million. Gross margin was 80.5%, down 1.4 percentage points. The company posted an operating loss of $20.7 million, and operating margin was -5.2%, down 3.1 percentage points. Net loss was $3.0 million, a swing from net income a year earlier. Diluted EPS was -$0.03, also a swing from a year earlier. Operating cash flow was $96.9 million, up 9.3%. Capital expenditures were $1.3 million. Current deferred revenue was $20.8 million, down 4.4%. Remaining performance obligations were $68.5 million, down 16.7%.
Operational metrics showed growth. BILL served 498,100 businesses using its solutions at the end of the first quarter. It processed $89 billion in total payment volume, up 12% year over year. Transactions processed reached 33 million, up 16%. The company announced three marquee Embed 2.0 partnerships with NetSuite, Paychex, and Acumatica. In October 2025, BILL launched BILL AI, including its first AI agents designed to collect and validate W-9s and reconcile receipts. The company also added Peter Feld and Lee Kirkpatrick to its board of directors. These moves aim to expand reach and embed BILL into more partner platforms.
Non-GAAP results painted a different profitability picture. Non-GAAP gross profit was $332.1 million, with an 83.9% non-GAAP gross margin. Non-GAAP operating income was $68.2 million, compared with $67.1 million a year earlier, an increase of 2%. Non-GAAP net income was $70.2 million, or $0.61 per diluted share, compared with $68.6 million, or $0.63 per diluted share. Free cash flow, a non-GAAP measure defined as operating cash flow adjusted for purchases of property and equipment and capitalized internal-use software costs, was $82.3 million, compared with $81.5 million. The gap between GAAP and non-GAAP results reflects stock-based compensation, depreciation and amortization, restructuring costs, and activism-related advisory fees.
Guidance covers the fiscal second quarter ending December 31, 2025 and the full fiscal year ending June 30, 2026. The company guides non-GAAP operating income of $62.5 million to $67.5 million for the fiscal second quarter and $256.5 million to $276.5 million for the full fiscal year. Non-GAAP net income guidance is $62.5 million to $66.5 million for the fiscal second quarter and $249.0 million to $265.0 million for the full fiscal year. Non-GAAP net income per diluted share guidance is $0.54 to $0.57 for the fiscal second quarter and $2.11 to $2.25 for the full fiscal year. Those non-GAAP net income figures assume a non-GAAP provision for income taxes of 20%. BILL also provided revenue ranges for both periods. A reconciliation of the non-GAAP guidance to the most directly comparable GAAP measures is not available without unreasonable effort.
Risks remain tied to the SMB base and the rate environment. BILL notes that lower interest rates reduce interest on funds held for customers. Macroeconomic uncertainty, inflation, tariffs, government budget cuts, and government shutdowns could pressure SMB spending or access to financing. The company also faces credit risk from BILL Divvy Cards and invoice financing, fraud and unauthorized card use, and dependence on accounting firms, financial institutions, and software partners. On October 15, 2025, BILL announced a reduction in force affecting approximately 6% of employees. It expects the restructuring to be substantially complete by December 31, 2025 and will consider additional efficiency actions. During the quarter, BILL repurchased 1,694,720 shares for $81.7 million under its August 2024 and August 2025 repurchase programs, leaving $283.7 million available under the August 2025 program as of September 30, 2025.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2026 | Q4 FY2025 | QoQ | Q1 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $395.7M | $383.3M | +3.2% | $358.4M | +10.4% |
| Gross profit | $318.7M | $309.8M | +2.9% | $293.8M | +8.5% |
| Gross margin | 80.5% | 80.8% | -0.3 pp | 82.0% | -1.4 pp |
| Research & development | $80.3M | $90.0M | -10.8% | $78.7M | +2.0% |
| Sales & marketing | $149.2M | $148.1M | +0.8% | $126.3M | +18.1% |
| General & administrative | $76.9M | $70.2M | +9.6% | $66.8M | +15.2% |
| Total operating expenses | $339.5M | $332.0M | +2.2% | $301.5M | +12.6% |
| Operating income (loss) | -$20.7M | -$22.2M | +6.9% | -$7.7M | -169.1% |
| Operating margin | -5.2% | -5.8% | +0.6 pp | -2.1% | -3.1 pp |
| Net income (loss) | -$3.0M | -$7.1M | +58.1% | $8.9M | -133.2% |
| Net margin | -0.8% | -1.8% | +1.1 pp | 2.5% | -3.2 pp |
| Diluted EPS | -$0.03 | -$0.07 | +$0.04 | $0.08 | -$0.11 |
Risks
The company reported a net loss of $3.0 million in FY2026 Q1 compared with net income of $8.9 million in FY2025 Q1, and operating loss widened to $20.7 million from $7.7 million. Accumulated deficit was $1.6 billion as of September 30, 2025.
A significant portion of revenue comes from SMBs, which have limited financial resources and have reacted to macro conditions by tightening budgets and selecting lower-cost payment methods. Recent reductions in U.S. federal government spending, including in the U.S. Small Business Administration, may adversely impact the SMBs BILL serves.
BILL Divvy Card and invoice financing expose the company to credit risk; for a substantial majority of card credit, BILL purchases participation interests and bears entire credit risk if spending businesses fail to pay. BILL does not file UCC liens on BILL Divvy Card balances, limiting recovery in bankruptcy.
Risk management may not prevent fraud by customers, spending businesses, or third parties, and AI tools increase the risk of fraudulent activity. MD&A noted a $1.9 million increase in provision for fraud losses in FY2026 Q1 driven by higher transaction volume.
BILL launched AI agents for W-9 collection and receipt reconciliation, and plans more agents, but competitors may incorporate AI more quickly or successfully. The EU Artificial Intelligence Act and other evolving AI rules may require additional controls and constrain use of AI.
Revenue from interest on funds held for customers decreased 13% to $37.7 million in FY2026 Q1 from $43.5 million in FY2025 Q1, about 10% of total revenue versus 12% a year earlier. Falling rates and customer migration to instant transfer or BILL Divvy Card could further reduce this revenue.
Competitors such as Intuit QuickBooks have launched native bill payment, and Brex and Ramp have introduced bill payment products; financial institution partners may also build or bundle competing solutions. These competitors may have greater resources, brand recognition, and ability to bundle at lower prices.
Credit products depend on relationships with Cross River Bank, WEX Bank, and Web Bank. Regulatory and litigation challenges, including true lender or de facto lender claims, could limit or prevent BILL from offering credit products on favorable terms.
BILL Divvy Card funding relies on warehouse facilities and $600.0 million of Revolving Credit Facilities, with $330.0 million drawn as of September 30, 2025. If finance partners terminate, interrupt, or raise costs, BILL may have to use limited corporate cash and could be unable to support card receivables purchases.
As of September 30, 2025, approximately 498,500 businesses used BILL's solutions and TPV processed was approximately $89.3 billion in FY2026 Q1. BILL transfers large sums of customer funds daily and is subject to money transmitter and FinCEN requirements, with failure to maintain controls potentially leading to loss of licenses.
As of September 30, 2025, BILL had $33.5 million of 2025 Notes due December 1, 2025, $123.5 million of 2027 Notes, $1.4 billion of 2030 Notes, and $330.0 million drawn under Revolving Credit Facilities. Debt covenants, conversion settlement, or refinancing constraints could adversely affect liquidity.
Risk factors cite activist stockholder actions as a potential negative influence; MD&A reported a $2.5 million increase in consulting fees for outside services in FY2026 Q1, including fees related to shareholders' activism.
BILL announced a reduction in force on October 15, 2025 impacting approximately 6% of employees and recorded $8.9 million of restructuring expense in FY2026 Q1. The company may pursue additional structural efficiency actions, which could disrupt operations.
Critical accounting estimates state that sustained macroeconomic pressures could negatively impact the fair value of BILL's single reporting unit and require a quantitative goodwill impairment test, resulting in a non-cash impairment charge.
Relationships with more than 9,000 accounting firm partners contribute a significant portion of total revenue, and the company has an exclusive partnership with CPA.com. Reputational harm or failure to grow these relationships could weaken growth prospects.
SaaS KPIs
All quarters →Free Cash Flow
Non-GAAP Gross Margin
Core Revenue
Non-GAAP Operating Income
Summary, forecast, risks and KPIs are extracted from BILL Holdings, Inc.'s SEC filings for Q1 FY2026 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.